Executive Summary

Revenue grew 7.5% year over year to $3.00B; diluted EPS was $0.29. Comparable sales rose 0.3%, while restaurant-level operating margin fell 100 bps to 24.5% as marketing and inflation pressured profitability .
Versus Street: EPS modestly beat ($0.29 vs $0.2875 consensus*) while revenue missed ($3.00B vs $3.02B consensus*) and EBITDA came in below consensus*; mixed print with margin pressure and soft transactions persisting .
Guidance reset: full-year 2025 comparable sales moved from “about flat” (Q2) to a “low-single digit decline” (Q3); CFO also guided Q4 comps down low- to mid-single digits, citing ongoing macro and cohort weakness .
Stock narrative catalysts: measured 2026 pricing strategy, stepped-up menu innovation (Red Chimichurri, Carne Asada), HEAP equipment rollout, and international expansion, against tariff and beef inflation headwinds .

What Went Well and What Went Wrong

What Went Well

Strong unit growth and Chipotlanes: Opened 84 company-owned restaurants in Q3 (64 Chipotlanes), with Chipotlanes enhancing access, margins, and returns .
Cost of sales efficiency: Food, beverage, and packaging costs fell to 30.0% of revenue (down ~60 bps YoY), aided by 2024 pricing and efficiencies despite inflation and tariffs .
Menu and digital engagement: Red Chimichurri and Carne Asada drove incremental transactions and engagement; management emphasized accelerated innovation and rewards program enhancements to lift frequency .

Quote: “Our extraordinary value proposition and brand strength remain strong… accelerate menu innovation and create more engaging digital experiences to ensure we emerge stronger and get back to driving positive transaction growth.” — CEO Scott Boatwright .

What Went Wrong

Margin pressure: Restaurant-level margin declined to 24.5% (-100 bps YoY) and operating margin to 15.9% (from 16.9%), with higher marketing, labor inflation, and tariffs weighing on profitability .
Transaction softness: Comps rose just 0.3% on a 1.1% average check increase offset by -0.8% transactions; underlying trends stepped down in late Q3 and October .
Tariffs and beef inflation: CFO flagged ~30 bps tariff impact in Q3 and ~50 bps ongoing, plus higher beef costs; Q4 cost of sales expected in the “high 30%” range with premium LTO mix .

Financial Results

Core P&L and Margins (YoY and Sequential)

Metric	Q3 2024	Q2 2025	Q3 2025
Revenue ($USD Billions)	$2.794	$3.063	$3.003
Net Income ($USD Millions)	$387.4	$436.1	$382.1
Diluted EPS ($)	$0.28	$0.32	$0.29
Operating Margin (%)	16.9%	18.2%	15.9%
Restaurant-Level Margin (%)	25.5%	27.4%	24.5%

Comps, Checks, Transactions, Digital

KPI	Q3 2024	Q2 2025	Q3 2025
Comparable Sales (%)	6.0%	-4.0%	0.3%
Avg Check YoY Change (%)	n/a	0.9%	1.1%
Transactions YoY Change (%)	n/a	-4.9%	-0.8%
Digital Sales (% of F&B rev)	n/a	35.5%	36.7%

Unit Growth and AUVs

KPI	Q3 2024	Q2 2025	Q3 2025
Company-Owned Restaurants Opened	86	61	84
Partner-Operated Restaurants Opened	1	0	2
Restaurants at End of Period (Company-Owned)	3,615	3,839	3,916
Average Restaurant Sales (AUV, $ Thousands)	$3,184	$3,142	$3,132

Non-GAAP Reconciliations

Metric	Q3 2024	Q3 2025
Adjusted Net Income ($USD Millions)	$366.6	$389.9
Adjusted Diluted EPS ($)	$0.27	$0.29
Adjusted G&A ($USD Millions)	$149.3	$138.7
Adjusted Effective Tax Rate (%)	23.8%	22.8%

Street Consensus vs Actual (Q3 2025)

Metric	Consensus	Actual	Surprise
Revenue ($USD Billions)	$3.0225*	$3.003	-$0.0195
EPS ($)	$0.2875*	$0.29	+$0.0025
EBITDA ($USD Millions)	$590.1*	$575.1*	-$15.0

Values with asterisks retrieved from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Comparable Restaurant Sales	FY 2025	“About flat” (Q2 PR)	Low-single digit decline (Q3 PR)	Lowered
New Company-Owned Openings	FY 2025	315–345; >80% Chipotlane	315–345; >80% Chipotlane	Maintained
Underlying Effective Tax Rate	FY 2025	25–27% (before discrete)	25–27% (before discrete)	Maintained
Comparable Restaurant Sales (Q4 framing)	Q4 2025	n/a	Low- to mid-single digit decline (CFO)	New detail (cautious)
New Openings	FY 2026	n/a	350–370 total; 10–15 international partner-operated; >80% Chipotlane for co-owned	Introduced
Pricing Approach	FY 2026	Annual broad increases historically	Slow/measured pricing over time; won’t fully offset mid-single-digit inflation near-term (margin pressure)	Strategic shift

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Consumer Cohorts & Macro	Q1: slowdown in consumer spending noted; plan to return to positive transaction comps in H2 . Q2: comps -4% with momentum building in June .	Low/mid-income (≤$100k) and ages 25–35 reducing frequency; underlying trends stepped down through Oct .	Deteriorating through Q4 setup
Pricing Strategy	Q1/Q2: 2024 price benefits; trailing industry pricing .	2026 shift to gradual, measured pricing; won’t fully offset inflation; value gap to peers (20–30%) emphasized .	Strategic reset to protect value
Tariffs & Beef Inflation	Q2: inflation in steak/chicken .	~30 bps hit in Q3, ~50 bps ongoing; beef rising; Q4 cost of sales in high-30% range .	Inflation headwind intensifies
HEAP Equipment/Throughput	Q1: BOH innovation progress .	175 restaurants live; better culinary, labor efficiency, throughput; nationwide rollout ~3 years .	Scaling; positive early data
Menu Innovation (LTOs, sauces)	Q2: building momentum; marketing initiatives .	Red Chimichurri; Carne Asada; dips/sauces driving incidents and frequency; more LTOs planned in 2026 .	Accelerating cadence
Digital & Rewards	Q2: digital 35.5% of sales .	Gamification (Chipotle IQ, Freepotle); Chipotle U college program; plan to add significant rewards features .	Engagement improving
International Expansion	Q2: base 3–5 licensed/partner restaurants .	Middle East expansion (Qatar, Kuwait); Asia JV (South Korea, Singapore in 2026) .	Expanding footprint

Management Commentary

Strategic posture: “We are confident… return to consistent, positive transaction growth… surpass $4 million in AUVs over time, expand to 7,000 restaurants in North America long term, and accelerate international expansion” — CEO .
Value proposition: “Currently… delivered at a price point that is 20% to 30% below our peers… our value proposition has never been stronger” — CEO .
Inflation/tariffs: “Tariffs impacted the quarter by about 30 bps… ~50 bps ongoing… Q4 cost of sales in the high 30% range” — CFO .
Pricing roadmap: “We’re going to take a slow and measured approach to pricing in 2026… we don’t plan to fully offset inflation in the near term” — CFO .
Operational focus: “System-wide retraining… reset quarterly bonus incentives to align with digital order accuracy and guest experience” — CEO .

Q&A Highlights

Q4 and FY comps: Underlying transaction softness continued; Q4 comps expected to decline low- to mid-single digits; FY comps guided to low-single digit decline .
Pricing philosophy: 2026 will feature measured pricing rolled out over months, not fully offsetting mid-single-digit inflation to preserve value; margin flow-through targeted longer-term .
Tariff and beef cost headwinds: ~30 bps tariff hit in Q3; ~50 bps ongoing; higher beef costs; premium LTO mix elevates Q4 cost of sales .
Throughput and accuracy: HEAP improves throughput and culinary; digital accuracy to be re-prioritized in incentives over on-time delivery .
Unit growth and cannibalization: ~100 bps comp headwind from new units historically; cannibalized stores recover within 12–13 months; confidence in 350–370 openings in 2026 .

Estimates Context

EPS slightly beat consensus, while revenue and EBITDA missed; results suggest Street may need to trim near-term margin assumptions given Q4 cost of sales and marketing intensity .
With guidance reset (FY comps down; Q4 comps down), consensus for 2025–2026 may need lower near-term traffic/margins and a phased pricing recovery path .